When the board of directors or your supervisor called you to a meeting, you likely felt a little trepidation. Maybe things at your California company have been rocky, and you may even have sensed some uneasiness among your managers and staff. Of course, it is always in the back of your mind that you may be terminated, but when it actually happens, it still comes as a shock.
Your director may have told you they were taking the company in a different direction or that they had lost faith in you. Then they offered you a severance. It seems generous and will certainly help tide you over until you can find another position. However, before you accept, be certain you know what you may be trading away.
Read the fine print
Depending on how long you have been with the company, your severance package may be a substantial offer, paid in a lump sum or spread out over several weeks. Typically, companies offer a week or more pay for each year of your employment. You may also receive extended health care benefits and assistance with placement in a new position. However, you may have questions about your stock options, accrued vacation and sick time, and other benefits you had on the job.
You will have time to consider the offer, and you may be able to negotiate for better terms. One of the most important factors to understand in your severance package offer is what your company will ask you to sign if you accept the payout. In many cases, you may trade generous severance for your signature on these or other agreements:
- A non-compete document, which will prevent you from seeking work in a competing company within a certain geographic region for a determined period of time
- A confidentiality agreement stating that you will not reveal the terms of the severance or of your departure from the company
- An agreement prohibiting you from speaking negatively about the company or its policies
- A waiver of your rights to take legal action if you feel the termination was wrongful
If you feel your board or supervisor terminated you for discriminatory reasons or as retaliation for some lawful action, such as whistleblowing, you may not want to be too hasty in signing away your rights. In fact, you would be wise to take the time to have an attorney review the severance documents and assist you in understanding your legal rights and other options that may be available to you.